Samantha's Office Supplies Manufactures Desk Organizers in Its Processing Department

question 58

Multiple Choice

Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After inspection, some units are spoiled due to undetectable material defects. Spoiled units generally constitute 3% of the good units. Data provided for February 2017 are as follows:

What are the direct material and conversion costs of all the units that were initially in the beginning work-in-process inventory and were subsequently shipped? Take into account the costs related to the completion of the conversion of the units during the month. Use the FIFO method of process costing. (Round any cost per unit calculations to the nearest cent.)

• A) $78,336; $44,000
• B) $0; $47,002
• C) $54,835; $48,782
• D) $40,239; $18,605

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Definitions:

Intrinsic Rewards

Non-material rewards that come from within an individual, such as personal satisfaction or joy from completing a task or learning something new.

Novel Ideas

Innovative or original thoughts and concepts that have not been previously conceived or fully explored.

Innovation

The process of developing and implementing new ideas in an organization.

Creativity

The production of novel but potentially useful ideas.